TRUE/FALSE

1. A check for $456 was erroneously charged by the bank as $654. In order for the bank reconciliation to balance, you must add a$198 to the bank statement balance.
   1. True
   2. False
2. If an adjustment for an NSF check is made in a companys bank reconciliation, then the company must have written a bad check during the month.
   1. True
   2. False
3. The amount of the adjusted balance appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.
   1. True
   2. False
4. All bank memorandums reported on the bank reconciliation require entries in the depositors accounts.
   1. True
   2. False
5. The bank reconciliation is an important part of the system of internal control.
   1. True
   2. False
6. The main reason that the bank statement cash balance and the depositors cash balance do not initially balance is due to timing differences.
   1. True
   2. False
7. The bank reconciles its statements to the depositors records.
   1. True
   2. False
8. In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the is added to the balance per depositors records.
   1. True
   2. False
9. In preparing a bank reconciliation, the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositors records ledger.
   1. True
   2. False
10. A check outstanding for two consecutive months will appear only on the first months ban reconciliation.
    1. True
    2. False
11. After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per depositors records as well as items in the balance sheet.
    1. True
    2. False
12. A business that requires that all cash payments be made by check can not use a petty cash system.
    1. True
    2. False
13. In establishing a petty cash fund, a check written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.
    1. True
    2. False
14. Expenditures from a petty cash fund are documented by a petty cash receipt.
    1. True
    2. False
15. The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.
    1. True
    2. False
16. When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished.
    1. True
    2. False
17. Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately.
    1. True
    2. False
18. A compensating balance occurs when a bank may require a depositor to maintain a maximum cash balance.
    1. True
    2. False
19. Cash equivalent are short-term investments that will be converted to cash within 120 days.
    1. True
    2. False
20. Money market accounts, commercial paper, and United States Treasury Notes are examples of cash equivalents
    1. True
    2. False